On Wednesday, stocks in Asia benefited from the latest decision of the U.S. Federal Reserve. As a reminder, on Tuesday, the Federal Reserve decided to reduce interest rates by half a percentage point.
It is important to note that it was the first such emergency action coming in between scheduled meetings since the 2008 financial crisis.
Two days ago, U.S. stock indexes declined. For instance, the Dow Jones Industrial Average closed 785.91 points lower at 25,917.41.
The S&P 500 fell 2.8% to end its trading day 3,003.37. Meanwhile, the Nasdaq composite dropped 3% to close at 8,684.09.
Asian stocks and a virus outbreak
Despite all of the problems, South Korea’s Kospi index added 2.24% to close at 2,059.33. The country proposed to allocate an extra budget of 11.7 trillion Korean won ($9.86 billion) to tackle the coronavirus outbreak. This move helped to boost the Kospi index.
Similarly, mainland Chinese stocks also saw gains on the day. The Shanghai Composite rose 0.63% to about 3,011.67. At the same time, the Shenzhen component was slightly higher at 11,493.02.
Fortunately, the Shenzhen composite also rose on Wednesday. Its index increased 0.361% to approximately 1,795.74.
The Caixin/Markit services Purchasing Managers’ Index (PMI) fell from 51.8 to 26.5 in January. Moreover, a private survey released on Wednesday showed China’s services sector reached the worst result on record in February.
Furthermore, Hong Kong’s Hang Seng index rose 0.22% as of its final hour of trading.
In Japan, the Nikkei 225 closed slightly higher to 21,100.06. The Topix index ended its trading day 0.17% lower at 1,502.50.
Stocks in Australia declined, the S&P/ASX 200 fell 1.71% lower at 6,325.40.
Investors are closely monitoring the situation. Stocks in Asia, as well as other parts of the world, need time to deal with issues caused by the virus outbreak. Private and governmental organizations should work together to mitigate the outcome of the outbreak.
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